Copper prices bounced on Wednesday as the dollar steadied ahead of key U.S. inflation data and a decision on interest rates from the Federal Reserve.

Traders said expectations of a dovish statement from the Fed and a lower U.S. currency - which makes dollar-priced metals cheaper for holders of other currencies - had triggered buying across the board in industrial metals.

Benchmark copper on the London Metal Exchange (LME) was up 0.6%, at $9,815 a metric ton as of 1129 GMT. It hit seven-week lows of $9,680 a ton on Tuesday.

"Focus is well and truly on U.S. CPI data and what the Fed says and most importantly the 'dot plot'," a copper trader said, adding that the market was also waiting loan and total social financing (TSF) data from top consumer China this week.

The Fed is widely seen holding rates at between 5.25% and 5.5%. The "dot plot" is its updated economic projection.

Copper retreated 11.6% from its all-time high of $11,104.5 on May 20.

In terms of fundamentals, long-term demand drivers for copper, including artificial intelligence, are yet to actualise, said Dan Smith, head of research at Amalgamated Metal Trading.

"Copper demand has hit a soft patch with more wire rod plants cutting operation in May after a sharp rally."

High inventory levels pointed to a lacklustre buying appetite. Copper inventory remained at a four-year high of 336,964 tonnes in warehouses monitored by the Shanghai Futures Exchange (ShFE).

For other metals, tin went up 3.2%, to $32,925, after a dip to a one-month low last week. It has gained 31.3% so far this year.

"We have seen some dip-buying by algorithmic traders past few days. Tin stocks are also decreasing," a tin trader said.

Algorithmic trading models, based on technical signals to buy or sell, have been "working better" in smaller markets like nickel, tin and zinc, Smith said.

ShFe's tin inventory dropped 9.4% since the beginning of June, to 16,297 tonnes.

"Semiconductor sales, one indicator for tin demand, was not bad. Appetite for solar panels and microchips also were alright," Smith added.

Aluminium was down 0.1%, at $2,530, zinc rose 1.9%, to $2,823, lead ticked up 0.2%, to $2,161 and nickel was down 0.1%, at $17,795.

(Reporting by Julian Luk; Editing by Sonia Cheema and Pooja Desai)